KPS Plans to Seek $3 Billion for Next Fund

KPS Capital Partners LP plans to seek $3 billion for its next special situations fund, which it will officially begin marketing next year, according to two people familiar with the matter.

The new fund will likely come to market in the second quarter, said one of the people. The fund’s predecessor, KPS Special Situations Fund III, originally raised $1.2 billion in 2007, and then accepted another $800 million of capital in 2009 to take advantage of “unprecedented” opportunities arising from the financial crisis.

Daniel Yunger, a spokesman at Kekst & Co., declined to comment on behalf of KPS.

New York-based KPS makes control investments in special situations that include corporate divestitures and carve-outs, turnarounds, bankruptcies, financial restructurings and out-of-favor industries. The firm primarily targets manufacturing companies.

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